Egypt defends IMF loan amid worries

A day after floating its currency and raising fuel prices, Egypt’s government turned to defending the unprecedented measures to a frustrated population increasingly panicked about making ends meet. “Today, we don’t have the luxury to postpone these decisions; today, we can’t take painkiller decisions,” Prime Minister Sherif Ismail said at a news conference early Friday, where at least five ministers – including the finance, oil and supply briefs – lined up to speak. “We’re taking important decisions, decisions that will revive the economy and take it forward.”

Long lines of cars had formed at gas stations overnight in Cairo, after local newspapers reported the government’s plan to raise the price of gasoline and diesel by 47 percent.

The central bank had earlier announced it would abandon currency controls – the pound tumbled as much as 45 percent – and raise interest rates to the highest level in more than a decade. The steps should all but secure a $12 billion IMF loan seen as crucial to attracting investments and ending a dollar shortage that has crippled business activity.

The government has good reason to fear social unrest, which has led to the ouster of two presidents over the past five years. Many Egyptians have soured on the administration of President Abdel-Fattah al-Sisi as inflation soared to the highest level since 2009 in recent months, while a recent sugar shortage has exacerbated tensions. Officials have said Egyptians must make sacrifices to revive the economy and shrink one of the Middle East’s highest budget deficits.

“How am I going to afford this?” engineer Ahmed Adel, 35, said. “I’m single with no children, I can’t imagine how people with families are going to live with food and fuel prices reaching those levels.”